February 2017 Dividend Income And Expenses

Is winter over yet?  I’m SO ready for Winter to be over…but sadly spring is still a long ways off in the Pacific Northwest.

Technically spring is supposed to start in April, along with the Skagit Valley Tulip Festival.  Unfortunately, Old-man winter always takes a lot of convincing to leave.

In my mind, spring really doesn’t get started until May around here.  Usually the snow and freezing rain have stopped by then.

The good news is that we’re finally starting to get a little more light in the day.  Instead of it being dark by 4:30pm, it now gets dark at 5:30pm.  A whole extra hour of daylight to go outside and do stuff!  Woot!

That’s a gain of almost 2 minutes of daylight per day!

But enough about our crappy weather….let’s get on with the numbers!

Expenses For February

Expenses in February turned out very reasonable, and lower than we spent in January!  In part, that could be because February is the shortest month of the year.

As with most months, the mortgage and daycare consumed the largest chunk of our expenses at $4405.25.

Outside of mortgage and daycare costs, we only spent $789 for the month of February.  How about them apples?  That’s lower than usual, partly because some bi-monthly utility bills weren’t billed in February.

Food spending was also lower than average too.  We ate the same as previous months, but for whatever reason we came in under $500 in Feb.  

(Don’t worry, I didn’t lose any weight from not eating.  If anything, I ate too much.)

The food spending anomaly was probably just a slight draw-down on the pantry inventory.  More than likely, March will be more expensive to compensate. 🙂

The “Other” category was where the exciting stuff happened this month, with spending of $127.86.  Most of that was money spent at the home center.

February was one of those months where a simple DIY fix turned into a far larger project….twice.

DIY Shenanigans

First, I set out to replace some burned out lightbulbs in our bedroom.

Easy fix, right?  They were spotlight-type bulbs that shine downward from the ceiling.  These kinds of lights are usually halogen and burn very hot.  Subsequently they burn-out quickly too.  So I figured, “It’s time to upgrade to LED bulbs and stop this replacement nonsense once and for all!”

Ha!  Famous last words!

Turns-out, the dimmer switches used in our bedroom were not “LED ready”.  The result was LED bulbs that wouldn’t turn off completely with our existing non-LED dimmer switches.

The “fix” was to replace the dimmers with more expensive LED versions (like these).  Argh!!  At $21 each, I should have just purchased the two dimmers off Amazon, instead of bothering with the overprice home center.  Amazon would have been cheaper.  

The LED bulbs weren’t cheap either, at $9 for three LED bulbs.  Overall, the light quality is better, but I would have been better off financially by sticking with inefficient halogen bulbs.

The second major DIY rabbit-hole in February was a drippy bathroom sink Mrs. Tako asked me to fix.

Never having the opportunity to fix a dripping sink faucet before, I watched a bunch of YouTube videos to get the general idea.  

Most of the time when your sink drips, the faucet cartridge has gone bad and needs replacing.  A cheap $7-$10 fix.

“OK, that’s not too hard” …or so I thought.

After popping off the faucet handle, I was able to find the cartridge… but found something else even more concerning:

Rust had eaten away the washers holding the pipe, and water was actually dripping down underneath the sink.  Argh!! More stuff to fix!

Our local home center didn’t have the necessary parts, and I had no idea what brand of faucet it was.  There was no name or serial number printed anywhere on the sink.  It was an interesting mystery to solve…

The faucet cartridge ended-up being the key to tracking down the necessary parts.  There are literally dozens of different kinds of faucet cartridges in use today, and every manufacturer uses a different style.  I found what looked like a matching replacement cartridge online — it was a Price Pfister branded cartridge.  From there, I started looking through the list of faucets.  A few minutes of research revealed we had a Treviso widespread bathroom faucet.

This is where my luck improved.  Upon calling the Pfister replacement parts department, I learned the faucet had a lifetime warranty.  They shipped me all the replacement parts for free.

Other than my over priced adventures in DIY home repair, the other category did have some “fun” expenses.  Tako Jr. #1 went to his very first movie in the theater!  I took him to see the new Lego Batman movie.

When did movie theaters get so expensive?  Tickets for the two of us cost $21.35.

Tako Jr. #1 was nervous at first, but we made it through the whole movie without a major incident.  On the way home he threw a huge tantrum though.  I guess he was tired from the long movie.

Dividends For February

Dividends for February were pretty much non-existent…

The small income earned in February was interest earned on our uninvested cash.

While the small income in February was a little disappointing, that’s just how the investment income game works.  Most investments pay out once a quarter.  I expect a much higher dividend income (around $8k) in March, like we saw in December.  

For the year so far, dividends totaled to $4,131:

It’s too early in the year to make any calls about our dividend income, but my goal is to grow our dividend income by 10% in 2017 — half from dividend increases and half from investing new capital.

I’d like to hit $53k in dividends this year.

So far, only one of our holdings has announced a dividend increase this year (it was a 10% increase), but I’m expecting most of those announcements will happen in the second quarter.

Portfolio Changes For February

Just like January, we made no portfolio changes to speak of in February.  To my eyes, most investments look very expensive right now with the S&P 500 PE at 26.58.  That means the S&P 500 has a tiny 3.76% earnings yield, and a real earnings growth rate of -2.8%.

That’s not really a situation I want to invest my money into.  With the Federal Reserve looking to raise interest rates several times in 2017, I expect some of this unbridled stock market enthusiasm will begin to calm down throughout the year.  Mr. Market is in a really good mood right now, but I doubt it will last.

I’m in no hurry to invest excess cash right now, despite the fact that I want to grow our dividend income this year.  For me, capital preservation takes precedence over chasing income.

That said, I haven’t been ignoring our investment portfolio either.  I’ve been researching different ETF’s, airline stocks, and even dividend growth stocks.  None of them have (yet) shown me the right numbers that would make me pull the investing-trigger.

Recently, I’ve been considering several stocks for possible inclusion into our portfolio — IBM, UPS, and AMGN.  All three fit many of my investing criteria, but none just “nail it”.

I’ve been on the fence about IBM for a long time, and haven’t purchased any shares.  But, as I keep learning more about their business, I’m beginning see some long-term positives.  I might just finally pull the trigger on it one day.

UPS and AMGN are new investment ideas for me, but I’m still in research mode.  Both investments are slow growing companies, and both look a little expensive given their respective industries and metrics.  Are they leaders in their industry?  Do they have competitive advantages?  Are their returns on capital higher than average?  There’s lots of questions to answer.

For now, I’m content to sit on the sidelines and continue reading.